Parliament approved laws raising the instant asset write-off threshold from $1,000 to $20,000 for the 2024 financial year only five days before the end of the financial year. 

Small businesses will have a major cash flow benefit from this change, which lets them write off the whole cost of qualified depreciable assets in the year of purchase instead of depreciating the assets over many years.

Any depreciable asset bought for less than $20,000 between July 1, 2023, and June 30, 2024, might be written off in the year of purchase for small businesses. Since companies may immediately lower their taxable income by the whole cost of the asset, this quick deduction can considerably improve cash flow.

The item must be initially utilised or installed and ready for use for a taxable purpose during the designated time to qualify for the write-off. For example, having a receipt for an industrial refrigerator is insufficient; the fridge has to be delivered and set before the end of the financial year to be written off for 2024.

Small businesses may deduct the whole cost of many assets as long as each individual item costs less than $20,000; this applies per asset. This gives companies great freedom and chances to make investments in many new assets while enjoying the write-off.

Right now, before Parliament, there is a bill proposing to extend this higher barrier to June 30, 2025. Should this extension be approved, small businesses would have an even more extended window to benefit from the $20,000 rapid asset write-off, therefore promoting company development and investment.

All things considered, small businesses would find great value in the higher threshold for the fast asset write-off because it provides quick financial gains and motivates investment in necessary assets.

For any questions you may have related to company tax, please feel free to contact the small business experts at Bates Cosgrave.